−Removed: Set forth below is only a summary of the principal risks associated with our business.
−Removed: You should consider carefully the following discussion of risks, as well as the full discussion of risks included in this Annual Report on Form 10-K.
−Removed: • We have incurred significant losses since inception, we may continue to incur losses in the future and we may not be able to generate sufficient revenue to achieve and maintain profitability.
−Removed: • We may not be able to generate sufficient revenue to achieve and maintain profitability and our current or future products may not achieve or maintain sufficient commercial market acceptance.
−Removed: • Our operating results may fluctuate significantly, which makes our future operating results difficult to predict and could cause our operating results to fall below expectations or any guidance we may provide.
−Removed: • New product development and commercialization involve a lengthy and complex process and we may be unable to develop or commercialize new products on a timely basis, or at all.
−Removed: • Our current revenue is primarily generated from sales of our tests and we are highly dependent on them for our success.
−Removed: • If our products, or our competitors’ liquid or tissue biopsy-based products, do not meet the expectations of patients and our customers, our operating results, reputation and business could suffer.
−Removed: • If we are unable to support demand for our current and future products, including ensuring that we have adequate capacity to meet increased demand, or we are unable to successfully manage our anticipated growth, our business could suffer.
−Removed: • We rely on a limited number of suppliers or sole suppliers for some of our laboratory instruments and materials and may not be able to find replacements or promptly transition to alternative suppliers.
−Removed: • If we cannot maintain our current relationships, or enter into new relationships, with biopharmaceutical companies, our revenue prospects could be reduced.
−Removed: • If we cannot compete successfully with our competitors, we may be unable to increase or sustain our revenue or to achieve and then sustain profitability.
−Removed: • We have experienced challenges attracting and retaining qualified personnel due to competitive labor markets and may continue to do so, and may be unable to manage our future growth effectively, all of which could make it difficult to execute our business strategy.
−Removed: • We conduct business in a heavily regulated industry, and changes in regulations or violations of regulations may, directly or indirectly, reduce our revenue, adversely affect our operations and financial condition, and harm our business.
−Removed: • Certain of our tests are currently marketed as LDTs, and future changes in FDA enforcement discretion for LDTs could subject our product offerings to more significant regulatory requirements.
−Removed: • If third-party payers, including commercial payers and government healthcare programs, do not provide coverage of, or adequate reimbursement for, our tests, our business and results of operations will be negatively affected.
−Removed: • Our billing and claim processing are complex and time-consuming, and any delay in submitting claims or failure to comply with applicable billing requirements could hinder collection and have an adverse effect on our revenue.
−Removed: • Issued patents covering our products could be found invalid or unenforceable if challenged, or our patent applications may never issue.
−Removed: If we are unable to obtain and maintain sufficient intellectual property protection for our technology, or if the scope of the intellectual property protection obtained is not sufficiently broad, our competitors could develop and commercialize products similar or identical to ours, and our ability to successfully commercialize our products may be impaired.
−Removed: • The price of our common stock has fluctuated substantially and may do so in the future, and you may not be able to resell shares of our common stock at or above the price at which you purchased them.
−Removed: • Our indebtedness could expose us to risks that could adversely affect our business, financial condition and results of operations or result in dilution to our stockholders.
−Removed: • The COVID-19 global pandemic and the worldwide attempts to contain it have adversely impacted our supply chain and other aspects of our business, as well as our results of operations, and could continue to do so.
Our operations and financial results are subject to various risks and uncertainties including those described below.
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The risks and uncertainties described below are not the only ones we face.
−Removed: Additional risks and uncertainties that we are unaware of, or that we currently believe are not material, may also become important factors that adversely
−Removed: affect our business.
+Added: Additional risks and uncertainties that we are unaware of, or that we currently believe are not material, may also become important factors that adversely affect our business.
If any of the following risks or others not specified below materialize, our business, financial condition and results of operations could be materially and adversely affected.
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Even if we succeed in increasing adoption of our existing products and services by physicians, obtaining additional coverage decisions from commercial and government payers, maintaining and creating relationships with our existing and new biopharmaceutical partners, and developing and commercializing additional products and services, we may not be able to generate sufficient revenue to achieve or maintain profitability.
−Removed: We believe our commercial success is dependent upon our ability to continue to successfully market and sell our current and future products, to continue to expand our current relationships and develop new relationships with clinicians and biopharmaceutical customers and to develop and commercialize new products based on our Guardant Health Oncology Platform.
+Added: We believe our commercial success is dependent upon our ability to continue to successfully market and sell our current and future products, to continue to expand our current relationships and develop new relationships with clinicians and biopharmaceutical customers and to develop and commercialize new products.
Our ability to achieve and maintain sufficient commercial market acceptance of our existing and future products will depend on a number of factors, including:
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Because we are not contracted with these payers, they determine the amount they are willing to reimburse us for tests.
−Removed: We have provided testing services to patients with many cancer types and indications, most of the time as a non-participating provider through 2021.
+Added: We have provided testing services to patients with many cancer types and indications, some of the time as a non-participating provider through 2022.
When we have received payment as a non-participating provider, the amounts, on average, were significantly lower than for participating providers.
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Historic success and payments are not indicative of future success of and payments from such appeals.
−Removed: Due to the inherent variability and unpredictability of the reimbursement landscape, including related to the amount that payers reimburse us for any of our tests, we estimate the amount of revenue to be recognized at the time a test is
−Removed: provided and record revenue adjustments if and when the cash subsequently received for a test differs from the revenue recorded for the test.
+Added: Due to the inherent variability and unpredictability of the reimbursement landscape, including related to the amount that payers reimburse us for any of our tests, we estimate the amount of revenue to be recognized at the time a test is provided and record revenue adjustments if and when the cash subsequently received for a test differs from the revenue recorded for the test.
Due to this variability and unpredictability, previously recorded revenue adjustments are not indicative of future revenue adjustments from actual cash collections, which may fluctuate significantly.
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Despite our business development efforts, it could be difficult, expensive and/or time-consuming for biopharmaceutical companies to switch diagnostic tests for their products, and our tests may not be widely accepted by biopharmaceutical companies, if at all, which could in turn hinder the growth of sales of our tests.
−Removed: If we are unable to achieve commercial success for our tests, our business, results of operations and financial condition would be
−Removed: materially and adversely affected.
+Added: If we are unable to achieve commercial success for our tests, our business, results of operations and financial condition would be materially and adversely affected.
We cannot assure that our tests will continue to maintain or gain market acceptance, and any failure to do so would materially harm our business and results of operations.
−Removed: If our products, or our competitors’ products, do not meet the expectations of patients and our customers, our operating results, reputation and business could suffer.
+Added: If our products do not meet the expectations of patients and our customers, our operating results, reputation and business could suffer.
Our success depends on the market’s confidence that we can provide reliable, high-quality precision oncology products that will improve clinical outcomes, lower healthcare costs and enable better biopharmaceutical development.
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Furthermore, if our competitors’ products do not perform to expectations, it may result in lower confidence in our tests as well.
−Removed: As a result, the failure of our products or our competitors’ products to perform as expected could significantly impair our operating results and our reputation.
+Added: As a result, the failure of our products to perform as expected could significantly impair our operating results and our reputation.
In addition, we may be subject to legal claims arising from any defects or errors in our products.
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If we cannot maintain our current relationships, or enter into new relationships, with biopharmaceutical companies, our revenue prospects could be reduced.
−Removed: Biopharmaceutical customers collaborate with us for analysis of whole blood or plasma samples for multiple applications primarily to support clinical trials, including patient identification, companion diagnostics and retrospective testing.
+Added: Biopharmaceutical customers collaborate with us for analysis of whole blood or plasma samples for multiple applications primarily to support clinical studies, including patient identification, companion diagnostics and retrospective testing.
In the years ended December 31, 2022, 2021 and 2020, revenue from our top five biopharmaceutical customers, including their affiliated entities, accounted for 18%, 18% and 27% of our total revenue, respectively.
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If we cannot compete successfully with our competitors, we may be unable to increase or sustain our revenue or to achieve and then sustain profitability.
−Removed: Growing understanding of the importance of biomarkers linked with therapy selection and response is leading to more companies offering services in genomic profiling.
+Added: Growing understanding of the importance of biomarkers linked with therapy selection, response and early screening is leading to more companies offering services in genomic profiling.
The promise of biopsy testing is also leading to more companies attempting to enter the space and compete with us.
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This may change over the next few years as a result of new competitors entering through investment and acquisition activity.
−Removed: Our competitors within the liquid biopsy space include Foundation Medicine, Inc., which was acquired by Roche Holdings, Inc.
−Removed: in July 2018, Roche Molecular Systems, Inc., Thermo Fisher Scientific Inc., Illumina, Inc., Qiagen N.V.
−Removed: Invitae Corporation, and Sysmex Inostics.
−Removed: In addition, GRAIL, Inc., Natera Inc., Exact Sciences Corp., and Freenome Holdings, Inc.
−Removed: among others, are developing and/or commercializing tests that are competitive with our Guardant SHIELD for early cancer detection.
−Removed: Competitors within the broader genomics profiling space based on tissue include laboratory companies such as Bio-Reference Laboratories, Inc., Laboratory Corporation of America and Quest Diagnostics, Inc., as well as companies such as Foundation Medicine, Inc., Caris Life Sciences, Inc., Myriad Genetics, Inc., Tempus Labs, Inc., and NeoGenomics Laboratories, Inc., that sell molecular diagnostic tests for cancer to physicians and have or may develop tests which compete with our tests.
+Added: Our competitors within the liquid biopsy space for therapy selection include Foundation Medicine, Inc., which was acquired by Roche Holdings, Inc.
+Added: Roche Molecular Systems, Inc., Thermo Fisher Scientific, Inc., Illumina, Inc., Qiagen N.V., Invitae Corporation, Caris Life Science, Tempus Labs, Inc., and Agilent Technologies, Inc.
+Added: In addition, NeoGenomics Laboratories, Inc., Natera, Inc., Exact Sciences Corp., among others, are our competitors in minimal residual disease testing.
+Added: Additionally, our competitors in the early screening testing space include GRAIL, Inc., Exact Sciences Corp., Freenome Holdings, Inc., Delfi Diagnostics and InterVenn Biosciences.
+Added: Competitors within the broader genomics profiling space based on tissue include laboratory companies such as Bio-Reference Laboratories, Inc., Laboratory Corporation of America and Quest Diagnostics, Inc., as well as companies such as Foundation Medicine, Inc., Myriad Genetics, Inc., and most if not all of the competitors within the liquid biopsy space for therapy selection, that sell molecular diagnostic tests for cancer to physicians and have or may develop tests that compete with our tests.
In addition, we are aware that certain of our customers are also developing their own tests and may decide to enter our market or otherwise stop using our tests.
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In addition to developing kits, certain diagnostic companies also provide next-generation sequencing platforms that could be used for liquid biopsy testing.
−Removed: These include Illumina, Inc., Thermo Fisher Scientific Inc.
−Removed: and other companies developing next-generation sequencing platforms that are sold directly to biopharmaceutical companies, clinical laboratories and research centers.
−Removed: While many of the applications for these platforms are focused on research and development applications, each of these companies has launched and will continue to commercialize products and services focused on the clinical oncology market.
+Added: These include Illumina, Inc., Thermo Fisher Scientific Inc., Pacific Biosciences of California, Inc., Ultima Genomics, Inc., Oxford Nanopore Technologies Limited, and other companies developing next-generation sequencing platforms that are sold directly to biopharmaceutical companies, clinical laboratories and research centers.
+Added: While many of the applications for these platforms are focused on research and development applications, each of these companies has launched and could continue to commercialize products focused on the clinical oncology market.
These tests could include FDA-approved diagnostic kits, which can be sold to the clients who have purchased their platforms.
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If the actual number of patients who would benefit from our products, the price at which we can sell our products, or the annual total addressable market for our products is smaller than we have estimated, it may impair our sales growth and have an adverse impact on our business.
−Removed: The precision oncology industry is subject to rapid change, which could make our Guardant Health Oncology Platform, our current products and any future products we may develop, obsolete.
+Added: The precision oncology industry is subject to rapid change, which could make our current products and any future products we may develop, obsolete.
Our industry is characterized by rapid changes, including technological and scientific breakthroughs, frequent new product introductions and enhancements and evolving industry standards, all of which could make our current and future products obsolete.
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There have also been advances in methods used to analyze very large amounts of molecular information.
−Removed: We must continuously enhance our Guardant Health Oncology Platform and develop new products to keep pace with evolving standards of care.
+Added: We must continuously enhance our platform and develop new products to keep pace with evolving standards of care.
If we do not update our product offerings to reflect new scientific knowledge about cancer biology, information about new cancer therapies or relevant clinical studies, our products could become obsolete and sales of our current products and any new products we may develop could decline or fail to grow as expected.
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Our future financial performance and our ability to commercialize our products, to increase our sales and to compete effectively will depend, in part, on our ability to manage this potential future growth effectively, without compromising quality.
−Removed: Outside the United States, we established the Joint Venture with SoftBank for sales of our products throughout Asia, the Middle East and Africa.
−Removed: We share a measure of control of the Joint Venture, and if its sales and marketing efforts for our products in those regions are not successful, our business would be materially and adversely affected.
+Added: Outside the United States, we established Guardant AMEA for sales of our products throughout Asia, the Middle East and Africa.
+Added: If the sales and marketing efforts for our products in those regions are not successful, our business would be materially and adversely affected.
In other territories, such as Europe, we sell our tests primarily through distributor relationships or direct contracts with hospitals.
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We rely on Illumina as the sole supplier of the sequencers and as the sole provider of maintenance and repair services for these sequencers.
−Removed: Any disruption in operations of Illumina or other sole or limited suppliers or termination or suspension of our relationships with them could materially and adversely impact our supply chain and laboratory operations of our precision oncology platform and thus our ability to conduct our business and generate revenue.
+Added: Any disruption in operations of Illumina or other sole or limited suppliers or termination or suspension of our relationships with them could materially and adversely impact our supply chain and laboratory operations and thus our ability to conduct our business and generate revenue.
These limited or sole suppliers could engage in diverse types of businesses, including selling products or providing services in competition with us, and there can be no assurance that we can continue to receive required equipment, instruments or materials from them.
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In the case of an alternative supplier for Illumina, for example, there can be no assurance that replacement sequencers and various associated reagents will be available or will meet our quality control and performance requirements for our laboratory operations.
−Removed: If we should encounter delays or difficulties in securing, reconfiguring or integrating the
−Removed: equipment and reagents we require for our products or in revalidating our products, our business, financial condition, results of operations and reputation could be materially and adversely affected.
+Added: If we should encounter delays or difficulties in securing, reconfiguring or integrating the equipment and reagents we require for our products or in revalidating our products, our business, financial condition, results of operations and reputation could be materially and adversely affected.
The COVID-19 global pandemic and the worldwide attempts to contain it have adversely impacted our supply chain and other aspects of our business, as well as our results of operations, and could continue to do so.
The global outbreak of coronavirus 2019, or COVID-19, and the various attempts throughout the world to contain it, have created significant volatility, uncertainty and disruption, which has and may continue to impact the global economy, disrupt our supply chain, and create significant volatility and disruption of financial markets.
−Removed: In response to government directives and guidelines, health care advisories and employee and customer concerns, we have altered certain aspects of our operations.
−Removed: A number of our employees have had to work remotely from home and those on site have had to follow our social distance guidelines, which could impact their productivity.
−Removed: Travel and visits related to our business have been severely curtailed.
−Removed: We have also experienced significant reduction in access to our customers, including restrictions on our ability to market and distribute our tests and to collect samples.
+Added: We have experienced significant reduction in access to our customers, including restrictions on our ability to market and distribute our tests and to collect samples.
Our partners, vendors, suppliers and customers have similarly had their operations altered or temporarily suspended.
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The COVID-19 pandemic and its future developments present uncertainties with respect to our performance, financial condition, volume of business, results of operations, and cash flows.
−Removed: Due to the uncertain scope and duration of the COVID-19 pandemic and uncertain timing of any recovery or normalization, we are currently unable to estimate the resulting impacts on our operations
−Removed: and financial results.
+Added: Due to the uncertain scope and duration of the COVID-19 pandemic and uncertain timing of any recovery or normalization, we are currently unable to estimate the resulting impacts on our operations and financial results.
In addition to the impacts to our business, the global economy is likely to be significantly weakened as a result of actions taken in response to the COVID-19 pandemic.
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We currently derive the majority of our revenue from tests performed at a single laboratory facility located in Redwood City, California.
−Removed: Our facility and equipment could be harmed or rendered inoperable by natural or man-made disasters, including war, fire, earthquake, power loss, communications failure or terrorism, which may render it difficult or impossible for us to operate our Guardant Health Oncology Platform for some period of time.
+Added: Our facility and equipment could be harmed or rendered inoperable by natural or man-made disasters, including war, fire, earthquake, power loss, communications failure or terrorism, which may render it difficult or impossible for our laboratory operations.
The inability to perform our tests or to reduce the backlog that could develop if our facility is inoperable, for even a short period of time, may result in the loss of customers or harm to our reputation, and we may be unable to regain those customers or repair our reputation.
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Blood samples are typically received within days from the United States and outside the United States for analysis at our Redwood City, California facility.
−Removed: Disruptions in delivery services to transport samples to that facility, whether due to labor disruptions, bad weather, natural disaster, terrorist acts or threats or for other reasons could adversely affect specimen integrity and our ability to process samples in a timely manner, delay our provision of test results to our
−Removed: customers, and ultimately our reputation and our business.
+Added: Disruptions in delivery services to transport samples to that facility, whether due to labor disruptions, bad weather, natural disaster, terrorist acts or threats or for other reasons could adversely affect specimen integrity and our ability to process samples in a timely manner, delay our provision of test results to our customers, and ultimately our reputation and our business.
In addition, if we are unable to continue to obtain expedited delivery services to transport samples to us on commercially reasonable terms, our operating results may be adversely affected.
−Removed: We are exposed to risks associated with our joint venture with SoftBank, and may not realize the advantages we expect from it.
−Removed: We have a 50% ownership interest in the Joint Venture, Guardant Health AMEA, Inc., we formed with SoftBank in May 2018 to accelerate the commercialization of our products in Asia, the Middle East and Africa, with a near-term focus on Japan.
−Removed: However, the Joint Venture may not be successful in the timeframe we expect, or at all.
−Removed: Additionally, SoftBank shares a measure of control over the operations of the Joint Venture.
−Removed: As a result, our investment in our joint venture involves risks that are different from the risks involved in owning facilities and operations independently.
−Removed: These risks include the possibility that our joint venture or SoftBank has economic or business interests or goals that are or become inconsistent with our economic or business interests or goals;
−Removed: is in a position to take action contrary to our instructions, requests, policies or objectives;
−Removed: subjects us to unexpected liabilities;
−Removed: takes actions that reduce our return on investment;
−Removed: or takes actions that harm our reputation or restrict our ability to run our business.
−Removed: The joint venture agreement between us and SoftBank includes a put-call arrangement with respect to the shares of the Joint Venture held by SoftBank and its affiliates.
−Removed: SoftBank has a put right to cause us to purchase all shares of the Joint Venture held by SoftBank and its affiliates, and we have a call right to purchase all such shares in the event of (i) certain material disagreements relating to the Joint Venture or its business that may seriously affect the ability of the Joint Venture to perform its obligations under the joint venture agreement or may otherwise seriously impair the ability of the Joint Venture to conduct its business in an effective matter, other than one relating to the Joint Venture’s business plan or to factual matters that may be capable of expert determination;
−Removed: (ii) the effectiveness of our initial public offering, a change in control, the seventh anniversary of the formation of the Joint Venture, or each subsequent anniversary of each of the foregoing events;
−Removed: or (iii) a material breach of the joint venture agreement by the other party that goes unremedied within 20 business days.
−Removed: In November 2021, we exercised our call right to purchase all shares of the Joint Venture held by SoftBank and its affiliates, and therefore SoftBank no longer has a put right.
−Removed: Because the shares of the Joint Venture are not publicly traded and listed on a nationally recognized stock exchange, the purchase price per share of the Joint Venture will be determined by a third-party valuation firm.
−Removed: The third-party valuation firm may evaluate a range of factors and employ assumptions that are subjective in nature, which may result in the fair value of SoftBank’s interest in the Joint Venture being determined to be materially different from what has been recorded in our consolidated financial statements, including those included elsewhere in this Annual Report on Form 10-K.
−Removed: In accordance with the joint venture agreement, because we exercised our call right, SoftBank will choose the form of consideration we pay for SoftBank’s interest in the Joint Venture, which may be in cash (including in the form of a promissory note), shares of our common stock, or a combination of cash and common stock.
−Removed: Our purchase of the shares from SoftBank could cause us to experience significant cash outflow, could dilute our other stockholders’ holdings, and may adversely affect our financial condition and the price of our common stock.
International expansion of our business exposes us to business, regulatory, political, operational, financial, and economic risks associated with doing business outside of the United States.
−Removed: We currently have limited international operations, but our business strategy incorporates potentially significant international expansion, including through the Joint Venture with SoftBank, which we formed to accelerate the commercialization of our products in Asia, the Middle East and Africa.
−Removed: We plan to maintain distributor and partner relationships, to conduct physician and patient association outreach activities, to extend laboratory capabilities and to expand payer relationships, outside of the United States, both directly and through our joint venture.
+Added: We currently have limited international operations, but our business strategy incorporates potentially significant international expansion, including through Guardant AMEA, which we formed to accelerate the commercialization of our products in Asia, the Middle East and Africa.
+Added: We plan to maintain distributor and partner relationships, to conduct physician and patient association outreach activities, to extend laboratory capabilities and to expand payer relationships, outside of the United States.
Doing business internationally involves a number of risks, including:
• multiple, conflicting and changing laws and regulations such as privacy regulations, tax laws, export and import restrictions, economic sanctions and embargoes, employment laws, regulatory requirements and other governmental approvals, permits and licenses;
−Removed: • failure by us, our distributors, our local partners or the Joint Venture with SoftBank to obtain regulatory approvals or certifications for the use of our products in various countries;
+Added: • failure by us, our distributors, or our local partners to obtain regulatory approvals or certifications for the use of our products in various countries;
• presence of additional third-party patents or other intellectual property rights that may be relevant to our business and may potentially block our expansion;
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• natural disasters, political and economic instability, including wars, terrorism, and political unrest, boycotts, curtailment of trade and other business restrictions;
−Removed: • public health or similar issues, such as epidemics or pandemics, including the current outbreak of novel coronavirus (2019-nCoV), for which the World Health Organization declared a global emergency on January 30, 2020, that could cause business disruption for the Joint Venture, including the Joint Venture’s offices in Japan and Singapore, and make it more difficult to sell our tests in the affected countries or regions, many of which are in the JV Territory, and
+Added: • public health or similar issues, such as epidemics or pandemics, that could cause business disruption for our offices in Japan and Singapore, and make it more difficult to sell our tests in the affected countries or regions, and
• regulatory and compliance risks that relate to maintaining accurate information and control over sales and distributors’ activities that may fall within the purview of the U.S.
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We are subject to the FCPA, which prohibits companies and their intermediaries from making payments in violation of law to non-U.S.
−Removed: government officials for the purpose of obtaining or retaining business or securing any other improper advantage, as a result of our international customers that may order either directly from us or through the Joint Venture with SoftBank.
+Added: government officials for the purpose of obtaining or retaining business or securing any other improper advantage, as a result of our international customers.
Our reliance on independent distributors to sell our tests in ternationally demands a high degree of vigilance in maintaining our policy against participation in corrupt activity, because these distributors could be deemed to be our agents and we could be held responsible for their actions.
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In addition, the FDA and Congress have, for over the past decade, considered a number of proposals to end the FDA’s enforcement discretion policy for LDTs and subject LDTs to additional regulatory requirements.
−Removed: Even if the FDA does not modify its policy of enforcement discretion, whether due to changes in FDA policy or legislative action, the FDA may disagree that we are marketing our LDTs within the scope of its policy of enforcement discretion and may impose significant regulatory requirements, including the requirement for
−Removed: premarket review and subsequent marketing authorization.
+Added: Even if the FDA does not modify its policy of enforcement discretion, whether due to changes in FDA policy or legislative action, the FDA may disagree that we are marketing our LDTs within the scope of its policy of enforcement discretion and may impose significant regulatory requirements, including the requirement for premarket review and subsequent marketing authorization.
We may also be required to conduct clinical studies to support our currently marketed products or planned product launches.
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Medicare’s National Coverage Determination, or NCD, for Next Generation Sequencing, or NGS, first established in 2018 and subsequently updated in 2020 states that NGS tests, such as our Guardant360 test, are covered by Medicare nationally, when:
−Removed: (1) performed in a CLIA-certified laboratory, (2) ordered by a treating physician, (3) the patient meets certain clinical and treatment criteria, including having recurrent, relapsed, refractory, metastatic, or
−Removed: advanced stages III or IV cancer, (4) the test is approved or cleared by the FDA as a companion in vitro diagnostic for an FDA approved or cleared indication for use in that patient’s cancer, and (5) results are provided to the treating physician for management of the patient using a report template to specify treatment options.
+Added: (1) performed in a CLIA-certified laboratory, (2) ordered by a treating physician, (3) the patient meets certain clinical and treatment criteria, including having recurrent, relapsed, refractory, metastatic, or advanced stages III or IV cancer, (4) the test is approved or cleared by the FDA as a companion in vitro diagnostic for an FDA approved or cleared indication for use in that patient’s cancer, and (5) results are provided to the treating physician for management of the patient using a report template to specify treatment options.
The NGS NCD also states that each Medicare Administrative Contractor, or MAC, may provide local coverage of other next-generation sequencing tests for cancer patients only when the test is performed by a CLIA-certified laboratory, ordered by a treating physician and the patient meets the same clinical and treatment criteria required of nationally covered next-generation sequencing tests under the NGS NCD.
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In April 2014, Congress passed the Protecting Access to Medicare Act of 2014, or PAMA, which included substantial changes to the way in which clinical laboratory services are paid under Medicare.
−Removed: Under PAMA, laboratories that receive the majority of their Medicare revenue from payments made under the CLFS are generally required to report to CMS, beginning in 2017 and every three years thereafter (or annually for “advanced diagnostic laboratory tests”), private payer payment rates and volumes for each test they perform.
+Added: Under PAMA, laboratories that receive the majority of their Medicare revenue from payments made under the CLFS are generally required to report to CMS, beginning in 2017 and every three years thereafter (or annually for “advanced diagnostic laboratory tests”, or ADLT), commercial payer payment rates and volumes for each test they perform.
CMS uses this data to calculate a weighted median payment rate for each test, which is used to establish revised Medicare CLFS reimbursement rates for the test.
Laboratories that fail to report the required payment information may be subject to substantial civil monetary penalties.
−Removed: As we have begun billing Medicare for our tests, we are subject to reporting requirements under PAMA and the Medicare rate for our tests will be calculated in the future based on our private payer rates.
+Added: We are subject to reporting requirements under PAMA and the Medicare rate for our tests will be calculated in the future based on our private payer rates.
For clinical diagnostic laboratory tests furnished on or after January 1, 2018, their Medicare CLFS reimbursement rates are established upon these reported private payer rates.
−Removed: On December 10, 2021, Congress passed the Protecting Medicare and American Farmers from Sequester Cuts Act, which delays by one year the next data reporting period and prevents any reduction in payment amounts from commercial payer rate implementation in 2022.
+Added: On December 10, 2021, Congress passed the Protecting Medicare and American Farmers from Sequester Cuts Act, which delayed by one year the next data reporting period and prevented any reduction in payment amounts from commercial payer rate implementation in 2022.
+Added: On November 2, 2022, CMS published its final rule for the Medicare Physician Fee Schedule for calendar year (CY) 2023, including changes for clinical laboratories that take effect on January 1, 2023.
+Added: Changes include updated regulatory definitions to specify the data collection period for the data reporting period of January 1, 2023 through March 31, 2023;
+Added: revisions to indicate that data reporting is required every 3 years beginning January 2023;
+Added: and to confirm that for CY 2022, payment may not be reduced by more than 0% as compared to CY 2021, and for CYs 2023 through 2025, payment may not be reduced by more than 15% as compared to the amount established for the preceding year.
+Added: On December 29, 2022, Congress passed the Consolidated Appropriations Act, 2023, which prevented any reduction in payment amounts from commercial payor rate implementation for 2023;
+Added: delayed by one year data reporting requirements for tests other than ADLTs;
+Added: and extended the three-year period in which payment may not be reduced by more than 15%, to CYs 2024 through 2026.
If we are unable to obtain and maintain favorable reimbursement rates from commercial payers for our tests, this may adversely affect the tests’ Medicare reimbursement rates.
−Removed: We believe that we will be required to report private payer rates for our tests every three years;
−Removed: but this determination may change.
It is unclear what impact new Medicare pricing structures, such as those adopted under PAMA, may have on our business, financial condition, results of operations or cash flows.
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In addition, the target enrollment for certain of our clinical studies, including our ECLIPSE study, is based upon our estimates that a given percentage of enrolled patients will have a specified disease or condition, and we cannot be certain that these estimates will prove correct, or that our clinical studies, even if fully enrolled, will produce data sufficient to support the submission of a PMA or other marketing application to the FDA or a comparable regulatory authority.
−Removed: If our clinical studies do not enroll a sufficient number of patients to support submission of a PMA or similar marketing application, or if the number of patients enrolled with the target disease or condition is lower than we estimated, we may be required to enroll additional patients in our clinical studies or conduct additional clinical studies before we are able to seek and/or
−Removed: obtain marketing authorizations for our product candidates, which may result in significant additional expenses for us and could delay or prevent us from bringing our product candidates to market.
+Added: If our clinical studies do not enroll a sufficient number of patients to support submission of a PMA or similar marketing application, or if the number of patients enrolled with the target disease or condition is lower than we estimated, we may be required to enroll additional patients in our clinical studies or conduct additional clinical studies before we are able to seek and/or obtain marketing authorizations for our product candidates, which may result in significant additional expenses for us and could delay or prevent us from bringing our product candidates to market.
In addition, we may find it necessary to engage CROs to perform data collection and analysis and other aspects of our clinical studies, which might increase the cost and complexity of our studies.
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Each of these outcomes would harm our ability to market our tests, generate revenue or to achieve sustained profitability.
+Added: Interim, "topline" and preliminary data from our clinical studies that we announce or publish from time to time may change as more patient data become available and are subject to audit and verification procedures that could result in material changes in the final data.
+Added: From time to time, we may publicly disclose preliminary or topline data from our preclinical studies or clinical studies, which is based on a preliminary analysis of then-available data, and the results and related findings and conclusions are subject to change following a more comprehensive review of the data related to the particular study.
+Added: We also make assumptions, estimations, calculations and conclusions as part of our analyses of data, and we may not have received or had the opportunity to fully and carefully evaluate all data at time of disclosure.
+Added: As a result, the topline or preliminary results that we report may differ from future results of the same studies, or different conclusions or considerations may qualify such results, once additional data have been received and fully evaluated.
+Added: Topline data also remain subject to audit and verification procedures that may result in the final data being materially different from the preliminary data we previously published.
+Added: As a result, topline data should be viewed with caution until the final data are available.
+Added: From time to time, we may also disclose interim data from our preclinical and clinical studies.
+Added: Interim data from clinical studies that we may complete are subject to the risk that one or more of the clinical outcomes may materially change as patient enrollment continues and more patient data become available.
+Added: Adverse differences between preliminary, topline or interim data and final data could significantly harm our business prospects.
+Added: Further, disclosure of such data by us or by our competitors could result in volatility in the price of our common stock.
+Added: Further, others, including regulatory agencies, such as the FDA, may not accept or agree with our assumptions, estimates, calculations, conclusions or analyses or may interpret or weigh the importance of data differently, which could impact the value of the particular program, the approvability or commercialization of the particular product candidate or product and our company in general.
+Added: In addition, the information we choose to publicly disclose regarding a particular clinical study is based on what is typically extensive information, and you or others may not agree with what we determine is material or otherwise appropriate information to include in our disclosure and any information we determine not to disclose may ultimately be deemed significant with respect to future decisions, conclusions, views, activities or otherwise regarding a particular product, product candidate or our business.
+Added: If the interim, topline, or preliminary data that we report differ from actual results, or if others, including regulatory authorities, disagree with the conclusions reached, our ability to obtain approval for and commercialize our product candidates may be harmed, which could harm our business, operating results, prospects or financial condition.
Our “research use only” and “investigational use only” products could become subject to more onerous regulation by the FDA or other regulatory agencies in the future, which could increase our costs and delay our commercialization efforts, thereby materially and adversely affecting our business and results of operations.
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The performance characteristics of this product have not been established,” such products are not subject to the FDA’s pre- and post-market controls for medical devices.
−Removed: A significant change in the laws governing RUO or IUO products or how they are enforced may require us to change our business model in order to maintain compliance.
+Added: A significant change in the laws or policies governing RUO or IUO products or how they are enforced may require us to change our business model in order to maintain compliance.
For instance, in November 2013 the FDA issued a guidance document entitled “Distribution of In Vitro Diagnostic Products Labeled for Research Use Only or Investigational Use Only,” or the RUO/IUO Guidance, which highlights the FDA’s interpretation that distribution of RUO or IUO products with any labeling, advertising or promotion that suggests that clinical laboratories can validate the test through their own procedures and subsequently offer it for clinical diagnostic use as an LDT is in conflict with the RUO or IUO status.
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Even if we receive regulatory approval or certification of our products, we will continue to be subject to extensive regulatory oversight.
−Removed: Medical devices are subject to extensive regulation by the FDA in the United States, the MHLW in Japan, the European authorities, EEA competent authorities, and comparable regulatory agencies in other territories where we
+Added: Medical devices are subject to extensive regulation by the FDA in the United States, the MHLW in Japan, the European authorities, EEA competent authorities, and comparable regulatory agencies in other territories where we do business.
If any of our products are approved by the FDA, the MHLW, or other comparable foreign regulatory agencies or certified by notified bodies in foreign jurisdictions, we will be required to timely file various reports.
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In addition, the FDA may change its clearance and approval policies, adopt additional regulations or revise existing regulations, or take other actions which may prevent or delay approval or clearance of our current or future products under development.
−Removed: For example, in November 2018, FDA officials announced forthcoming steps that the FDA intends to take to modernize the premarket notification pathway under Section 510(k) of the FDCA.
−Removed: Among other things, the FDA announced that it planned to develop proposals to drive manufacturers utilizing the 510(k) pathway toward the use of newer predicates.
−Removed: These proposals included plans to potentially sunset certain older devices that were used as predicates under the 510(k) clearance pathway, and to potentially publish a list of devices that have been cleared on the basis of demonstrated substantial equivalence to predicate devices that are more than 10 years old.
−Removed: These proposals have not yet been finalized or adopted, and the FDA may work with Congress to implement such proposals through legislation.
−Removed: Accordingly, it is unclear the extent to which any proposals, if adopted, could impose additional regulatory requirements on us that could delay our ability to obtain new 510(k) clearances, increase the costs of compliance, or restrict our ability to maintain our current clearances, or otherwise create competition that may negatively affect our business.
−Removed: More recently, in September 2019, the FDA issued revised final guidance describing an optional “safety and performance based” premarket review pathway for manufacturers of “certain, well-understood device types” to demonstrate substantial equivalence under the 510(k) clearance pathway by showing that such device meets objective safety and performance criteria established by the FDA, thereby obviating the need for manufacturers to compare the safety and performance of their medical devices to specific predicate devices in the clearance process.
+Added: For example, on February 23, 2022, the FDA issued a proposed rule to amend the Quality System Regulation, or QSR, which establishes current good manufacturing practice requirements for medical device manufacturers, to align more closely with the International Organization for Standardization, or ISO, standards.
+Added: This proposal has not yet been finalized or adopted.
+Added: Accordingly, it is unclear the extent to which any proposals, if adopted, could impose increased costs of compliance, or otherwise negatively affect our business.
+Added: Additionally, in September 2019, the FDA issued revised final guidance describing an optional “safety and performance based” premarket review pathway for manufacturers of “certain, well-understood device types” to demonstrate substantial equivalence under the 510(k) clearance pathway by showing that such device meets objective safety and performance criteria established by the FDA, thereby obviating the need for manufacturers to compare the safety and performance of their medical devices to specific predicate devices in the clearance process.
The FDA maintains a list device types appropriate for the “safety and performance based” pathway and continues to develop product-specific guidance documents that identify the performance criteria for each such device type, as well as recommended testing methods, where feasible.
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government has shut down several times and certain regulatory agencies, such as the FDA, have had to furlough critical FDA employees and stop critical activities.
−Removed: Since the onset of the COVID-19 pandemic, the FDA has used a risk-based assessment system to identify the categories of regulatory activity that can occur within a given geographic area, ranging from mission critical inspections to resumption of all regulatory activities.
−Removed: In May 2021, FDA issued a “Resiliency Roadmap for FDA Inspectional Oversight” report, which stated that mission-critical inspections will continue to be prioritized.
−Removed: The report also stated that while routine surveillance inspections will continue to be conducted, the agency will prioritize higher-tiered needs.
−Removed: Thus, a longer interval between inspections will occur for lower-tiered inspection assignments as the agency adjusts to the impact of the COVID-19 pandemic.
+Added: Separately, in response to the global COVID-19 pandemic, the FDA postponed most inspections of domestic and foreign manufacturing facilities at various points.
+Added: Even though the FDA has since resumed standard inspection operations of domestic facilities where feasible, the FDA has continued to monitor and implement changes to its inspectional activities to ensure the safety of its employees and those of the firms it regulates as it adapts to the evolving COVID-19 pandemic, and any resurgence of the virus or emergence of new variants may lead to further inspectional delays.
Other regulatory authorities may adopt similar restrictions or other policy measures in response to the COVID-19 pandemic.
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CLIA certification is also required in order for us to be eligible to bill state and federal healthcare programs, as well as commercial payers, for our tests.
−Removed: We have a current CLIA certificate to perform our tests at our laboratory in Redwood City, California.
+Added: We have a current CLIA certification to perform our tests at our laboratory in Redwood City, California.
To maintain this certificate, we are subject to survey and inspection every two years.
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Complying with licensure requirements in new jurisdictions may be expensive, time-consuming and subject us to significant and unanticipated delays.
−Removed: Failure to comply with applicable clinical laboratory licensure requirements may result in a range of enforcement actions, including suspension, limitation or revocation of our CLIA certificate and/or state licenses, imposition of a directed plan of action, on-site monitoring, civil monetary penalties, criminal sanctions, inability to receive reimbursement from Medicare, Medicaid and commercial payers, as well as significant adverse publicity.
−Removed: Any sanction imposed under CLIA, its implementing regulations, or state or foreign laws or regulations governing clinical laboratory licensure or our failure to renew our CLIA certificate, a state or foreign license or accreditation, could have a material adverse effect on our business, financial condition and results of operations.
+Added: Failure to comply with applicable clinical laboratory licensure requirements may result in a range of enforcement actions, including suspension, limitation or revocation of our CLIA certification and/or state licenses, imposition of a directed plan of action, on-site monitoring, civil monetary penalties, criminal sanctions, inability to receive reimbursement from Medicare, Medicaid and commercial payers, as well as significant adverse publicity.
+Added: Any sanction imposed under CLIA, its implementing regulations, or state or foreign laws or regulations governing clinical laboratory licensure or our failure to renew our CLIA certification, a state or foreign license or accreditation, could have a material adverse effect on our business, financial condition and results of operations.
Even if we were able to bring our laboratory back into compliance, we could incur significant expenses and potentially lose revenue in doing so.
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• federal and state “Anti-Markup” rules, which, among other things, typically prohibit a physician or supplier billing for clinical or diagnostic tests (with certain exceptions) from marking up the price of a purchased test performed by another physician or supplier that does not “share a practice” with the billing physician or supplier;
−Removed: • the federal Physician Payments Sunshine Act, which requires certain manufacturers of drugs, biologicals, and kits, medical devices or supplies that require premarket approval by or notification to the FDA, and for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program to report annually to CMS, information related to (i) payments and other transfers of value to physicians (as defined by statute), certain other health care professionals beginning in 2022, and teaching hospitals, and (ii) ownership and investment interests in such manufacturers held by physicians and their immediate family members.
+Added: • the federal Physician Payments Sunshine Act, which requires certain manufacturers of drugs, biologicals, and kits, medical devices or supplies that require premarket approval by or notification to the FDA, and for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program to report annually to CMS, information related to (i) payments and other transfers of value to physicians (as defined by statute), certain other health care professionals such as physician assistants and nurse practitioners, and teaching hospitals, and (ii) ownership and investment interests in such manufacturers held by physicians and their immediate family members.
Failure to submit required information may result in significant civil monetary penalties for any payments, transfers of value or ownership or investment interests that are not timely, accurately, and completely reported in an annual submission, and may result in liability under other federal laws or regulations;
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Those informed consents could be challenged and prove invalid, unlawful, or otherwise inadequate for our purposes.
−Removed: Any such findings against us, or our biopharmaceutical partners, could force us to stop accessing or using data and samples or servicing or conducting clinical studies, which would hinder our product offerings or
+Added: Any such findings against us, or our biopharmaceutical partners, could force us to stop accessing or using data and samples or servicing or conducting clinical studies, which would hinder our product offerings or development.
We could also become involved in legal actions, which could consume our management and financial resources.
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Payers’ acceptance of the new code could be delayed, and transition to the new code could result in a decrease in reimbursement for our tests, both of which could potentially reduce revenue from commercial and government payers.
−Removed: In addition, Z-Code Identifiers are used by certain payers, including under Medicare's Molecular Diagnostic Services Program, or MolDx, to supplement CPT
−Removed: codes for molecular diagnostics tests such as our Guardant360 test.
+Added: In addition, Z-Code Identifiers are used by certain payers, including under Medicare's Molecular Diagnostic Services Program, or MolDx, to supplement CPT codes for molecular diagnostics tests such as our Guardant360 test.
Following the FDA approval of our Guardant360 CDx test, a new Z-Code Identifier was issued in August 2020.
In January 2021, a proprietary laboratory analyses, or PLA code was issued for our Guardant360 CDx with an effective date in April 2021.
−Removed: Additionally, based on this new PLA code, we applied to the Centers for Medicare and Medicaid Services or CMS for our Guardant360 CDx test to become an advanced diagnostic laboratory test, or ADLT.
−Removed: In March 2021, CMS approved ADLT status to the Guardant360 CDx test, which Medicare would then pay us at the lowest available commercial rate for the first three quarters from April 1, 2021.
−Removed: After the initial three quarters, Medicare would reimburse Guardant360 CDx services at the median rate of claims paid by commercial payers during this initial period.
−Removed: We are in the process of negotiating reimbursement for our Guardant Reveal, Guardant Response and Guardant360 TissueNext tests from commercial and governmental payers.
+Added: Additionally, based on this new PLA code, we applied to the CMS for our Guardant360 CDx test to become an advanced diagnostic laboratory test, or ADLT.
+Added: In March 2021, CMS approved ADLT status to the Guardant360 CDx test, based on which, Medicare paid us at the lowest available commercial rate from April 1, 2021 to December 31, 2021.
+Added: Effective January 1, 2022, Medicare has started to reimburse Guardant360 CDx services at the median rate of claims paid by commercial payers and this rate will apply until December 2023.
+Added: In March 2022, Palmetto GBA, the Medicare administrative contractor for MolDX, or MAC, responsible for administering Medicare’s Molecular Diagnostic Services Program, or MolDX, conveyed coverage for our Guardant360 TissueNext test under the existing local coverage determination.
+Added: The policy covers our Guardant360 TissueNext test for Medicare fee-for-service patients with advanced solid tumor cancers.
+Added: In July 2022, Palmetto GBA conveyed coverage for our Guardant Reveal test for fee-for-service Medicare patients in the United States with stage II or III colorectal cancer whose testing is initiated within three months following curative intent therapy, with an effective date of December 2021.
Due to the inherent variability and unpredictability of the reimbursement landscape, including related to the amount that payers reimburse us for any of our tests, we estimate the amount of revenue to be recognized at the time a test is provided and record revenue adjustments if and when the cash subsequently received for a test differs from the revenue recorded for the test.
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In addition, other legislative changes have been proposed and adopted since the ACA was enacted.
−Removed: On August 2, 2011, the Budget Control Act of 2011 was signed into law, which, among other things, reduced Medicare payments to providers by 2% per fiscal year, effective on April 1, 2013 and, due to subsequent legislative amendments to the statute, will remain in effect through 2030, with the exception of a temporary suspension from May 1, 2020 through March 31, 2021, unless additional Congressional action is taken.
+Added: On August 2, 2011, the Budget Control Act of 2011 was signed into law, which, among other things, reduced Medicare payments to providers, effective on April 1, 2013 and, due to subsequent legislative amendments to the statute, will remain in effect through 2032, with the exception of a temporary suspension from May 1, 2020 through March 31, 2022, unless additional Congressional action is taken.
We anticipate there will continue to be proposals by legislators at both the federal and state levels and in foreign jurisdictions, regulators and commercial and government payers to reduce healthcare costs while expanding individual healthcare benefits.
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Federal, state and foreign enforcement bodies have increased their scrutiny of interactions between healthcare companies and healthcare providers, which has led to a number of investigations, prosecutions, convictions and settlements in the healthcare industry.
−Removed: Our collection, use and disclosure of personally identifiable information, including patient and employee information, is subject to privacy and security laws and regulations, and our failure to comply with those laws and regulations or to adequately secure the information in our possession could result in significant liability or reputational harm.
+Added: Our collection, use and disclosure of personal information, including patient and employee information, is subject to privacy and security laws and regulations, and our actual or perceived failure to comply with those laws and regulations or to adequately secure the information in our possession could result in significant liability or reputational harm.
The global data protection landscape is rapidly evolving, and we are or may become subject to numerous state, federal and foreign laws, requirements and regulations governing the collection, use, disclosure, retention, and security of personal information.
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Concerns about and claims challenging our practices with regard to the collection, use, retention, disclosure or security of personally identifiable information or other privacy-related matters, even if unfounded and even if we are in compliance with applicable laws, could damage our reputation and harm our business.
−Removed: Numerous federal, state and foreign laws and regulations govern collection, dissemination, use and confidentiality of personally identifiable information and PHI, including HIPAA, state privacy and confidentiality laws (including state laws requiring disclosure of breaches);
+Added: Numerous federal, state and foreign laws and regulations govern collection, dissemination, use and confidentiality of personally identifiable information and protected health information, or PHI, including HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, and regulations promulgated thereunder, or collectively, HIPAA;
+Added: state privacy and confidentiality laws (including state laws requiring disclosure of breaches);
federal and state consumer protection and employment laws;
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Any failure or perceived failure by us to comply with federal, state or foreign laws or regulation, our internal policies and procedures or our contracts governing our processing of personal information could result in negative publicity, government investigations and enforcement actions, claims by third parties and damage to our reputation, any of which could have a material adverse effect on our operations, financial performance and business.
−Removed: HIPAA, as amended by HITECH, establishes a set of national privacy and security standards for the protection of PHI, by health plans, certain healthcare providers that submit certain covered transactions electronically, or ‘‘covered entities,’’ and their ‘‘business associates,’’ which are persons or entities that perform certain services for, or on behalf of, a covered entity that involve creating, receiving, maintaining or transmitting PHI.
+Added: HIPAA establishes a set of national privacy and security standards for the protection of PHI, by health plans, certain healthcare providers that submit certain covered transactions electronically and healthcare clearinghouses, or ‘‘covered entities,’’ and their ‘‘business associates,’’ which are persons or entities that perform certain services for, or on behalf of, a covered entity that involve creating, receiving, maintaining or transmitting PHI.
We are a covered entity under HIPAA and therefore must comply with its requirements to protect the privacy and security of health information and must provide individuals with certain rights with respect to their health information.
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States are also constantly amending existing laws, and creating new data privacy and security laws, requiring attention to frequently changing regulatory requirements.
−Removed: For example, the CCPA went into effect on January 1, 2020, and creates certain data privacy rights for California residents.
−Removed: The CCPA creates individual privacy rights for California consumers and increases the privacy and security obligations of entities handling certain personal information.
−Removed: The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches that is expected to increase data breach litigation.
−Removed: Further, the CPRA, recently passed in California.
−Removed: The CPRA will impose additional data protection obligations on covered businesses, including additional consumer rights processes, limitations on data uses, new audit requirements for higher risk data, and opt outs for certain uses of sensitive data.
−Removed: It will also create a new California data protection agency authorized to issue substantive regulations and could result in increased privacy and information security enforcement.
−Removed: The majority of the provisions will go into effect on January 1, 2023, and additional compliance investment and potential business process changes may be required.
−Removed: Similar laws have passed in Virginia and Colorado, and have been proposed in other states and at the federal level, reflecting a trend toward more stringent privacy legislation in the United States.
+Added: For example, the California Consumer Privacy Act, or CCPA went into effect on January 1, 2020, and creates certain data privacy rights for California residents.
+Added: The CCPA increases the privacy and security obligations of entities handling certain personal information, and provides for civil penalties for violations, as well as a private right of action for data breaches that has increased the likelihood of, and risks associated with data breach litigation.
+Added: Further, the California Privacy Rights Act, or CPRA, generally went into effect in January 2023, and imposes additional data protection obligations on covered businesses, including additional consumer rights processes, limitations on data uses, new audit requirements for higher risk data, and opt outs for certain uses of sensitive data.
+Added: It has also created a new California data protection agency authorized to issue substantive regulations and could result in increased privacy and information security enforcement.
+Added: Additional compliance investment and potential business process changes may be required.
+Added: Similar laws have passed in Virginia, Colorado, Connecticut, and Utah and have been proposed in other states and at the federal level, reflecting a trend toward more stringent privacy legislation in the United States.
These laws and regulations are not necessarily preempted by HIPAA, particularly if a state affords greater protection to individuals than HIPAA.
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The FTC expects a company’s data security measures to be reasonable and appropriate in light of the sensitivity and volume of consumer information it holds, the size and complexity of its business, and the cost of available tools to improve security and reduce vulnerabilities.
−Removed: In addition, the interpretation and application of consumer, health-related, and data protection laws, especially with respect to genetic samples and data, in the United States, the EEA, and elsewhere are often uncertain, contradictory, and in flux.
−Removed: We and our joint ventures operate or may operate in a number of countries outside of the United States whose laws may in some cases be more stringent than the requirements in the United States.
+Added: In addition, the interpretation and application of consumer, health-related, and data protection laws, especially with respect to genetic samples and data, in the United States, European Economic Area, or EEA, and elsewhere are often uncertain, contradictory, and in flux.
+Added: We operate or may operate in a number of countries outside of the United States whose laws may in some cases be more stringent than the requirements in the United States.
For example, EEA member states have specific requirements relating to cross-border transfers of personal data to certain jurisdictions, including to the United States where our laboratory resides.
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The GDPR applies to any company established in the EEA as well as to those outside the EEA if they collect and use personal data in connection with the offering of goods or services to individuals in the EEA or the monitoring of their behavior.
−Removed: The GDPR imposes strict data protection compliance regime including:
+Added: The GDPR imposes strict data protection compliance requirements including:
providing detailed disclosures about how personal data is collected and processed;
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and complying with the principal of accountability and the obligation to demonstrate compliance through policies, procedures, training and audit.
−Removed: The GDPR provides that EEA member states may make their own further laws and regulations limiting the processing of personal data, including genetic,
−Removed: biometric or health data, which could limit our ability to use and share personal data or could cause our costs could increase, and harm our business and financial condition.
+Added: The GDPR provides that EEA member states may make their own further laws and regulations limiting the processing of personal data, including genetic, biometric or health data, which could limit our ability to use and share personal data or could cause our costs could increase, and harm our business and financial condition.
Failure to comply with the requirements of GDPR and the applicable national data protection laws of the EEA member states may result in fines of up to €20,000,000 or up to 4% of the total worldwide annual turnover of the preceding financial year, whichever is higher, and other administrative penalties.
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For example, in July 2020, the Court of Justice of the EU, or the CJEU, limited how organizations could lawfully transfer personal data from the EEA to the United States by invalidating the Privacy Shield for purposes of international transfers and imposing further restrictions on use of the standard contractual clauses, or SCCs.
−Removed: The European Commission issued revised SCCs on June 4, 2021 to account for the decision of the CJEU and recommendations made by the European Data Protection Board.
−Removed: The revised SCCs must be used for relevant new data transfers from September 27, 2021;
−Removed: existing standard contractual clauses arrangements must be migrated to the revised clauses by December 27, 2022.
−Removed: There is some uncertainty around whether the revised clauses can be used for all types of data transfers, particularly whether they can be relied on for data transfers to non-EEA entities subject to the GDPR.
+Added: In March 2022, the United States and EU announced a new regulatory regime intended to replace the invalidated regulations;
+Added: however, this new EU-US Data Privacy Framework has not been implemented beyond an executive order signed by President Biden on October 7, 2022 on Enhancing Safeguards for United States Signals Intelligence Activities.
+Added: European court and regulatory decisions subsequent to the CJEU decision of July 16, 2020 have taken a restrictive approach to international data transfers.
+Added: As supervisory authorities issue further guidance on personal data export mechanisms, including circumstances where the SCCs cannot be used, and/or start taking enforcement action, we could suffer additional costs, complaints and/or regulatory investigations or fines, and/or if we are otherwise unable to transfer personal data between and among countries and regions in which we operate, it could affect the manner in which we provide our services, the geographical location or segregation of our relevant systems and operations, and could adversely affect our financial results.
+Added: Further, from January 1, 2021, companies have had to comply with the GDPR and also the United Kingdom GDPR, or the UK GDPR, which, together with the amended UK Data Protection Act 2018, retains the GDPR in UK national law.
+Added: The UK GDPR mirrors the fines under the GDPR, i.e., fines up to the greater of €20 million (£17.5 million) or 4% of global turnover.
We are also subject to evolving EU privacy laws on cookies and e-marketing.
−Removed: In the EEA and the United Kingdom, regulators are increasingly focusing on compliance with requirements in the online behavioral advertising ecosystem, and current national laws that implement the ePrivacy Directive will be replaced by an EU regulation known as the ePrivacy Regulation which will significantly increase fines for non-compliance.
In the EEA, informed consent is required for the placement of a cookie or similar technologies on a user’s device and for direct electronic marketing.
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We rely on a mixture of safeguards to transfer personal data from our EU business to the U.S., and could be impacted by changes in law as a result of a future review of these transfer mechanisms by European regulators or current challenges to these mechanisms in the European courts.
−Removed: Further, from January 1, 2021, companies have had to comply with the GDPR and also the United Kingdom GDPR, or the UK GDPR, which, together with the amended UK Data Protection Act 2018, retains the GDPR in UK national law.
−Removed: The UK GDPR mirrors the fines under the GDPR, i.e., fines up to the greater of €20 million (£17.5 million) or 4% of global turnover.
−Removed: The relationship between the United Kingdom and the EU in relation to certain aspects of data protection law remains unclear, and it is unclear how United Kingdom data protection laws and regulations will develop in the medium to longer term.
−Removed: The European Commission has adopted an adequacy decision in favor of the United Kingdom, enabling data transfers from EU member states to the United Kingdom without additional safeguards.
−Removed: However, the UK adequacy decision will automatically expire in June 2025 unless the European Commission re-assesses and renews/ extends that decision.
In addition to government regulation, privacy advocates and industry groups have and may in the future propose self-regulatory standards from time to time.
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We may be unable to make such changes and modifications in a commercially reasonable manner, or at all.
−Removed: Any inability to adequately address data privacy or security-related concerns, even if unfounded, or to comply with
−Removed: applicable laws, regulations, standards and other obligations relating to data privacy and security, could result in additional cost and liability to us, harm our reputation and brand, damage our relationships with consumers and harm our business, financial condition and results of operations.
+Added: Any inability to adequately address data privacy or security-related concerns, even if unfounded, or to comply with applicable laws, regulations, standards and other obligations relating to data privacy and security, could result in additional cost and liability to us, harm our reputation and brand, damage our relationships with consumers and harm our business, financial condition and results of operations.
We make public statements about our use and disclosure of personal information through our privacy policies, information provided on our website and press statements.
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It is possible that others will design around our current or future patented products, services or technologies.
−Removed: Some of such patent rights are being challenged, including at the United States Patent and Trademark Office, or USPTO, in post-grant
−Removed: proceedings, at the European Patent Office, or EPO, in opposition proceedings, and some of such patent rights may be challenged in the future.
+Added: Some of such patent rights are being challenged, including at the United States Patent and Trademark Office, or USPTO, in post-grant proceedings, at the European Patent Office, or EPO, in opposition proceedings, and some of such patent rights may be challenged in the future.
We may not be successful in defending any such challenges made against our owned or licensed patents or patent applications.
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These include allowing third-party submission of prior art to the USPTO during patent prosecution or post-grant proceedings, including post-grant review, inter partes review and derivation proceedings, to attack the validity of a patent.
−Removed: Because of a lower evidentiary standard in USPTO proceedings compared to the evidentiary standard in United States federal courts necessary to invalidate a patent claim, a third party could potentially provide evidence in a USPTO proceeding sufficient for the USPTO to hold a
−Removed: claim invalid even though the same evidence might not be sufficient to invalidate the claim if presented in a district court action.
+Added: Because of a lower evidentiary standard in USPTO proceedings compared to the evidentiary standard in United States federal courts necessary to invalidate a patent claim, a third party could potentially provide evidence in a USPTO proceeding sufficient for the USPTO to hold a claim invalid even though the same evidence might not be sufficient to invalidate the claim if presented in a district court action.
Accordingly, third parties have used and may continue to use the USPTO proceedings to invalidate our patent claims that would not have been invalidated if first challenged by the third party in a district court action.
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In addition, the agreements under which we currently license intellectual property or technology from third parties are complex, and certain provisions in such agreements could be susceptible to multiple interpretations.
−Removed: resolution of any such contract interpretation disagreement could narrow what we believe to be the scope of our rights to the relevant intellectual property or technology, or increase what we believe to be our financial or other obligations under the relevant agreement, either of which could have a material adverse effect on our business, financial condition, results of operations and prospects.
+Added: The resolution of any such contract interpretation disagreement could narrow what we believe to be the scope of our rights to the relevant intellectual property or technology, or increase what we believe to be our financial or other obligations under the relevant agreement, either of which could have a material adverse effect on our business, financial condition, results of operations and prospects.
Moreover, if disputes over licensed intellectual property impair our ability to enforce licensed intellectual property against third parties or use it to defend ourselves in litigation, the value of such licensed intellectual property may be diminished.
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and foreign issued patents and pending patent applications, which are owned by third parties, exist in the fields in which we are developing, manufacturing and/or commercializing products, services or technologies.
−Removed: As the precision oncology industry
−Removed: expands and more patents are issued, the risk increases that our products, services or technologies may be subject to claims of infringement of the patent rights of third parties.
+Added: As the precision oncology industry expands and more patents are issued, the risk increases that our products, services or technologies may be subject to claims of infringement of the patent rights of third parties.
Numerous significant intellectual property issues have been litigated, are being litigated and will likely continue to be litigated, between existing and new participants in our existing and targeted markets, and our competitors have asserted and may in the future assert that our products or services infringe their intellectual property rights as part of a business strategy to impede our successful entry into or growth in those markets, and we may enforce our owned or licensed intellectual property rights against our competitors and other parties.
78 unchanged sentences
In the event the conditional conversion feature of the 2027 Notes is triggered, the conversion of some or all of the 2027 Notes will dilute the ownership interests of our existing stockholders to the extent we deliver shares of our common stock upon such conversion.
−Removed: The 2027 Notes may become in the future convertible at the option of the holders of the 2027
−Removed: Notes prior to August 15, 2027 under certain circumstances as provided in the indenture governing the 2027 Notes.
+Added: The 2027 Notes may become in the future convertible at the option of the holders of the 2027 Notes prior to August 15, 2027 under certain circumstances as provided in the indenture governing the 2027 Notes.
Any sales in the public market of shares of our common stock issuable upon such conversion could adversely affect the price of our common stock.
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In addition, these provisions may make it more difficult for our stockholders to replace current members of our board of directors or add new members thereto.
−Removed: Because our board of directors is responsible for appointing the members of our management team, these
−Removed: provisions could in turn affect any attempts by our stockholders to change our management team.
+Added: Because our board of directors is responsible for appointing the members of our management team, these provisions could in turn affect any attempts by our stockholders to change our management team.
Among others, these provisions include that:
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We have made acquisitions of businesses, technologies and assets and may pursue additional acquisitions in the future.
−Removed: We also may pursue strategic alliances and additional joint ventures that leverage our Guardant Health Oncology Platform and industry experience to expand our product offerings or distribution.
+Added: We also may pursue strategic alliances and additional joint ventures that leverage our industry experience to expand our product offerings or distribution.
We have limited experience with acquisitions and forming strategic partnerships.
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The failure to obtain any required future financing may require us to reduce or curtail existing operations and could contribute to negative market perceptions about us or our securities.
+Added: As a result of adverse geopolitical and macroeconomic developments, including economic inflation and the responses by central banking authorities to control such inflation, the global credit and financial markets have experienced extreme volatility and disruptions and there has been increasing uncertainty about economic stability.
+Added: If the equity and credit markets remain depressed or further deteriorate as a result of this global uncertainty, it may make any necessary debt or equity financing more difficult, more costly and more dilutive.
+Added: Any of the above events could significantly harm our business, prospects, financial condition and results of operations and cause the price of our common stock to decline.
Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited.
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Therefore, if we attain profitability, we may be unable to use a material portion of our NOL carryforwards and other tax attributes, which could adversely affect our future cash flows.
+Added: Changes in tax laws or regulations could harm our financial condition and results of operations.
+Added: Changes in tax laws or regulations, or changes in interpretations of existing laws and regulations, could materially affect our financial condition and results of operations.
+Added: For example, the Biden administration and members of Congress have proposed, and future U.S.
+Added: presidential administrations may propose, various U.S.
+Added: federal tax law changes, which if enacted could have a material impact on our business operations and financial performance.
+Added: In addition, many countries in Europe, as well as a number of other countries and organizations, have recently proposed or recommended changes to existing tax laws or have enacted new laws, including as a result of the base erosion and profit shifting, or BEPS, project that is being led by the Organization for Economic Co-operation and Development, or OECD, and other initiatives led by the OECD or the European Commission.
+Added: Due to the expanding scale of our international business activities, these types of changes to the taxation of our activities could increase the amount of taxes imposed on our business.
+Added: Any of these outcomes could harm our financial position and results of operations.
We expect to incur significant additional costs as a result of being a public company, which may adversely affect our business, financial condition and results of operations.
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Our research and development programs and laboratory operations depend on our ability to attract and retain highly skilled scientists and technicians.
−Removed: We may not be able to attract or retain qualified scientists and technicians in the future due to the competition for qualified personnel among life science businesses, particularly near our headquarters in Redwood City, California.
+Added: We may not be able to attract or retain qualified scientists and technicians in the future due to the competition for qualified personnel among life science businesses, particularly near our headquarters in Palo Alto, California.
We also face competition from universities and public and private research institutions in recruiting and retaining highly qualified scientific personnel.
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If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could result in the imposition of significant civil, criminal and administrative penalties, including, without limitation, damages, monetary fines, individual imprisonment, disgorgement of profits, possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs or from coverage of commercial payers, contractual damages, reputational harm, diminished profits and future earnings, additional reporting or oversight obligations if we become subject to a corporate integrity agreement or other agreement to resolve allegations of non-compliance with the law and curtailment or restructuring of our operations, which could have a significantly adverse impact on our business.
−Removed: Whether or not we are successful in
−Removed: defending against such actions, we could incur substantial costs and expenses, including legal fees, and divert the attention of management from the operation of our business.
+Added: Whether or not we are successful in defending against such actions, we could incur substantial costs and expenses, including legal fees, and divert the attention of management from the operation of our business.
If we were to be sued for product liability or professional liability, we could face substantial liabilities that exceed our resources.
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Additionally, any product liability or professional liability lawsuit could damage our reputation or cause current clinical customers to terminate existing agreements with us and potential clinical customers to seek other partners, any of which could adversely impact our results of operations.
−Removed: We depend on information technology systems, and any failure of these systems could harm our business.
−Removed: We depend on information technology and telecommunications systems for significant elements of our operations, including our laboratory information management system, our computational biology system, our knowledge management system, our customer reporting and our GuardantConnect software platform.
−Removed: We have installed, and expect to expand, a number of enterprise software systems that affect a broad range of business processes and functional areas, including for example, systems handling human resources, financial controls and reporting, contract management, regulatory compliance and other infrastructure operations.
−Removed: In addition to the aforementioned business systems, we intend to extend the capabilities of both our preventative and detective security controls by augmenting the monitoring and alerting functions, the network design and the automatic countermeasure operations of our technical systems.
−Removed: These information technology and telecommunications systems support a variety of functions, including laboratory operations, test validation, sample tracking, quality control, customer service support, billing and reimbursement, research and development activities, scientific and medical curation and general administrative activities.
−Removed: In addition, our third-party provider of billing and collections services for late-stage clinical testing in the United States depends upon technology and telecommunications systems provided by its outside vendors.
−Removed: Information technology and telecommunications systems are vulnerable to damage from a variety of sources, including telecommunications or network failures, malicious human acts and natural disasters.
−Removed: Moreover, despite network security and back-up measures, some of our servers are potentially vulnerable to physical or electronic break-ins, computer viruses and similar disruptive problems.
−Removed: For example, in the past year, we identified security incidents involving an unauthorized actor obtaining access to our email system and sending phishing messages.
−Removed: Despite the precautionary measures we have taken in response to such incidents and to prevent other unanticipated problems that could affect our information technology and telecommunications systems, failures or significant downtime of our information technology or telecommunications systems or those used by our third-party service providers could prevent us from performing our comprehensive genomic analysis, preparing and providing reports to pathologists and oncologists, billing payers, processing reimbursement appeals, handling patient or physician inquiries, conducting research and development activities and managing the administrative aspects of our business.
−Removed: Any disruption or loss of information technology or telecommunications systems on which critical aspects of our operations depend could have an adverse effect on our business and our reputation, and we may be unable to regain or repair our reputation.
−Removed: Despite the security and maintenance measures we and our vendors and distributors have in place to help protect against system failures, our systems, and those of our vendors and distributors, remain vulnerable to delays, disruptions, data corruption, programming and/or human errors or other similar events, such as those due to system updates, natural disasters, malicious attacks, accidents, power disruptions, telecommunications failures, acts of terrorism or war, computer viruses, physical or electronic break-ins or similar events.
−Removed: Such incidents may disrupt our operations, result in losses, damage our reputation, and expose us to the risks of litigation and liability (including
−Removed: regulatory liability);
−Removed: and may have a material adverse effect on our business, results of operations and financial condition.
−Removed: Cyber-based attacks, security breaches, loss of data and other disruptions in relation to our information systems and computer networks, as well as those of our third-party service providers, could compromise sensitive information related to our business, prevent us from accessing it and expose us to substantial liability, which could adversely affect our business and reputation.
+Added: Cyberattacks, security breaches, loss of data and other disruptions in relation to our information technology systems, as well as those of our third-party service providers, could compromise sensitive information related to our business, prevent us from accessing it and expose us to substantial liability, which could adversely affect our business and reputation.
+Added: In the ordinary course of our business, we collect and store sensitive data, including PHI and other personal information, credit card and other financial information, intellectual property and proprietary business information owned or controlled by us or other parties such as customers and payers.
+Added: We manage and maintain our applications and data utilizing a combination of on-site systems and cloud-based data centers.
+Added: We utilize external security and infrastructure vendors to manage parts of our data centers.
+Added: We also communicate sensitive data, including patient data, through phone, Internet, facsimile, multiple third-party vendors and their subcontractors.
+Added: We depend on information technology systems for significant elements of our operations, including our laboratory information management system, our computational biology system, our knowledge management system, our customer reporting and our GuardantConnect software platform.
+Added: Our information technology systems support a variety of functions, including laboratory operations, test validation, sample tracking, quality control, customer service support, billing and reimbursement, research and development activities, scientific and medical curation and general administrative activities.
+Added: Our information technology systems store a wide variety of information critical to our business, including research and development information, patient data, commercial information and business and financial information.
+Added: We face a number of risks related to protecting this critical information, including loss of access, inappropriate use or disclosure, unauthorized access, inappropriate modification and our being unable to adequately monitor, audit or modify our controls over such critical information.
+Added: This risk extends to the third-party vendors and subcontractors we use to manage this sensitive data or otherwise process it on our behalf.
Cyberattacks, security breaches, computer viruses, malware and other incidents could cause misappropriation, loss or other unauthorized disclosure of confidential data, materials or information, including those concerning our customers and employees.
−Removed: Increasingly complex methods have been used in cyberattacks, including ransomware, phishing, structured query language injections and distributed denial-of-service attacks.
+Added: Increasingly complex methods have been used in cyberattacks, including ransomware, phishing, structured query language injections, social engineering schemes, and distributed denial-of-service attacks.
A cyberattack can also be in the form of unauthorized access or a blocking of authorized access.
The risk of a security breach or disruption, particularly through cyberattacks or cyber intrusion, including by computer hackers, foreign governments and cyber terrorists, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased.
−Removed: As a result of the COVID-19 pandemic, we and our third party service providers and partners may also face increased cybersecurity risks due to our reliance on internet technology and the number of our employees who are working remotely, which may create additional opportunities for cybercriminals to exploit vulnerabilities.
+Added: Our information technology systems and those of our third-party providers, strategic partners and other contractors, subcontractors or consultants are also vulnerable to attack and damage or interruption from telecommunications or network failures, natural disasters.
+Added: employee theft or misuse, human error, fraud, denial or degradation of service attacks, sophisticated nation-state and nation-state-supported actors or unauthorized access or use by persons inside our organization, or persons with access to systems inside our organization.
+Added: As a result of the COVID-19 pandemic, and continued hybrid working environment, we and our third party service providers and partners may face increased cybersecurity risks due to our reliance on internet technology and the number of our employees who are working remotely, which may create additional opportunities for cybercriminals to exploit vulnerabilities.
Furthermore, because the techniques used to obtain unauthorized access to, or to sabotage, systems change frequently and often are not recognized until launched against a target, we may be unable to anticipate these techniques or implement adequate preventative measures.
We may experience security breaches that may remain undetected for an extended period.
+Added: Even if identified, we may be unable to adequately investigate or remediate incidents or breaches due to attackers increasingly using tools and techniques that are designed to circumvent controls, to avoid detection, and to remove or obfuscate forensic evidence.
We can provide no assurance that we or our vendors will be able to detect, prevent or contain the effects of such attacks or other information security risks or threats in the future.
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In addition, if we fail to adhere to our privacy policy and other published statements or applicable laws concerning our processing, use, transmission and disclosure of protected information, or if our statements or practices are found to be deceptive or misrepresentative, we could face regulatory actions, fines and other liability.
−Removed: In the ordinary course of our business, we collect and store sensitive data, including PHI, personally identifiable information, credit card and other financial information, intellectual property and proprietary business information owned or controlled by us or other parties such as customers and payers.
−Removed: We manage and maintain our applications and data utilizing a combination of on-site systems and cloud-based data centers.
−Removed: We utilize external security and infrastructure vendors to manage parts of our data centers.
−Removed: We also communicate sensitive data, including patient data, through phone, Internet, facsimile, multiple third-party vendors and their subcontractors or integrations with third-party electronic medical records.
−Removed: These applications and data encompass a wide variety of information critical to our business, including research and development information, patient data, commercial information and business and financial information.
−Removed: We face a number of risks related to protecting this critical information, including loss of access, inappropriate use or disclosure, unauthorized access, inappropriate modification and our being unable to adequately monitor, audit or modify our controls over such critical information.
−Removed: This risk extends to the third-party vendors and subcontractors we use to manage this sensitive data or otherwise process it on our behalf.
The secure processing, storage, maintenance and transmission of this critical information are vital to our operations and business strategy, and we devote significant resources to protecting such information.
−Removed: Although we take reasonable measures to protect sensitive data from unauthorized access, use, modification or disclosure, no security measures can be perfect and our information technology infrastructure could be vulnerable to hackers, phishing scams, malware, viruses, security flaws, employee errors, and other malfeasance or inadvertent disruptions.
−Removed: Any breach or interruption of our security measures or information technology infrastructure could compromise our networks, and the information stored there could be accessed by unauthorized parties, publicly disclosed, lost or stolen.
−Removed: Any such access, breach, or other loss of information could result in legal claims or proceedings, and liability under federal, state or foreign laws that protect the privacy of personal information, such as HIPAA or HITECH, and
−Removed: regulatory penalties.
+Added: Although we take reasonable measures to protect sensitive data from unauthorized access, use, modification or disclosure, no security measures can be perfect.
+Added: We and certain of our service providers are from time to time subject to cyberattacks and security incidents.
+Added: For example, in the past year, we identified security incidents involving an unauthorized actor obtaining access to our email system and sending phishing messages.
+Added: Despite the precautionary measures we have taken in response to such incidents and to prevent other unanticipated problems that could affect our information technology and telecommunications systems, failures or significant downtime of our information technology or telecommunications systems or those used by our third-party service providers could prevent us from performing our comprehensive genomic analysis, preparing and providing reports to pathologists and oncologists, billing payers, processing reimbursement appeals, handling patient or physician inquiries, conducting research and development activities and managing the administrative aspects of our business.
+Added: While we do not believe that we have experienced any significant system failure, accident or security breach to date, if such an event were to occur, the information stored on our information technology systems could be accessed by unauthorized parties, publicly disclosed, lost or stolen.
+Added: Any such access, breach, or other loss of information could result in legal claims or proceedings, and liability under federal, state or foreign laws that protect the privacy of personal information, such as HIPAA, and regulatory penalties.
Notice of breaches is required to be made to affected individuals, the Secretary of the HHS or other state, federal or foreign regulators, and for extensive breaches, notice may need to be made to the media or State Attorneys General.
1 unchanged sentence
Although we have implemented security measures and an enterprise security program to prevent unauthorized access to patient data, such data is currently accessible through multiple channels, and there is no guarantee we can protect all data from breach.
−Removed: Unauthorized access, loss or dissemination could disrupt our operations (including our ability to perform our analysis, provide test results, bill payers or patients, process claims and appeals, provide customer assistance, conduct research and development, develop intellectual property, collect, process and prepare financial information, provide information about our tests and continue other patient and physician education and outreach efforts, and manage our business) and damage our reputation, any of which could adversely affect our business and financial condition.
We continue to prioritize security and the development of practices and controls to protect our systems.
4 unchanged sentences
If we cannot successfully resolve a security incident or contain any potential loss, it could materially impact our ability to operate our business as well as our results of operations and financial position.
+Added: We maintain cyber liability insurance;
+Added: however, this insurance may not be sufficient to cover the financial, legal, business or reputational losses that may result from an interruption or breach of our systems.
Unresolved Staff Comments
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.